If you’re seriously considering franchising, you’re not only pursuing excellence in your personal path, but also seeking it in the franchise you choose to partner with. Sifting through the ocean of information about your options can be a daunting process.
Here are seven key qualities you can use to help prioritize the most important qualities of each contender.
One of the most important questions you must ask as you assess any potential franchise investment is, “How does the franchisor provide its product in a way that it can replicate success in each new unit?” In other words, what is the business system?
When we talk about these systems, we’re talking about how the franchising company accomplishes everything that happens in the business. How do they do hiring, training, purchasing, marketing, product delivery, billing? What technology is implemented in these processes? As you gain more knowledge of individual companies, you can—and should—be impressed at the efficiency and comprehensiveness of their systems.
Great franchises leave little to chance—they have all the steps to success broken down into simple, meaningful, clear processes. And those steps mean that you should be able to see the uniformity from one unit to the next, or experience it in terms of marketing, responsiveness, product offerings and professionalism, if the company provides a service.
You won’t be privy to the inner workings of a franchisor’s systems at first glance, but you should be able to get a sense of efficiency and capability in any interaction with the company.
Can you appreciate how the franchisor, franchisee, and customer are in a win/win/win triangle? Do you feel like you could count on this company if you were a customer or client? What about as a franchisee? If so, think about where your confidence comes from: I’d be willing to bet it’s rooted in the systems the franchisor has in place to ensure quality and consistency from each franchisee.
Concept often colors your very first test of a franchisor. You ask the question, “What do they do?” and the answer to that question is the concept. This can be anything from bakery to business coach to painting franchise to gym. The possibilities are endless.
Once you know what the company does, the next question is about who it serves—so your answers above might become gourmet bakery and executive business coach, commercial painting franchise and women’s-only gym.
Beyond the market designation, a franchise might have a unique hook or angle that sets it apart—for example, the bakery might specialize in cupcakes or offer delivery; the business coach might specialize in a unique hiring process for finding “A players”; the painting franchise might leverage patented technology in its process; and the gym might build its schedule with super-efficient 30-minute classes. In each case, there’s some defining characteristic that helps set the business apart.
As consumers, we’re aware of concept already; but as a potential investor, you’re looking closer, at what makes a concept unique, how it’s implemented, and how it provides a satisfying experience to the customer.
What makes our bakery better than XYZ Bakery that’s been in business half a mile away for decades? And what does that gym offer its clientele to maintain their loyalty when there are so many other fitness businesses around? As an investor, you want to know what makes the franchise tick.
As you search franchise opportunities, you may choose to eliminate whole sectors of candidates based on industry and concept. For example, some people have no interest in working in the food industry—thus taking several hundred franchise possibilities out of the running. Some don’t want to be responsible for a retail outlet and the investment that entails—and there goes another huge sector.
It’s fine to set clear parameters regarding what kind of businesses you don’t want to consider, but be careful about dismissing too many possibilities out of hand. In my experience with investment candidates, after they’ve gotten up close and personal with a few well-chosen franchise concepts, many choose the option that was their last choice before digging in and learning more.
The key at this early stage is being able to identify a concept that benefits everyone involved: the franchisor has a winning idea that grows and makes money; the franchisee finds a way to leverage his or her business acumen to help further build the business and earn profits; and the customer receives a beneficial service or product.
If a franchise’s concept exhibits this win/win/win design and seems solid and logical to you, then it’s time to move on to the next measure of assessment: the business system.
Every franchisor has a unique approach to training, and, in some cases, the more you invest the more help you’re likely to receive. Many businesses have stellar plans in place for getting you up to speed—and up and running.
In this business, I’ve had the opportunity to see companies that offer bare-bones training for their franchisees and those that deliver five-star classroom and onsite instruction. Is there a correlation between training and success? Often there is, though certainly not always. No amount of training can compensate for an inferior product, a flawed business system, or a terrible location. But when things are equal, great training is a huge plus.
One of the great advantages of buying into an established franchise is brand recognition. As a franchisee, you don’t have to start at square one to prove that Brand A sells good stuff or great service at a fair price—the franchisor has already done that for you.
The value in being able to put on the mantle of trust, reliability, excellence, friendly service—whatever Brand A is associated with—is a big part of what you’re paying for.
Some companies’ images stick with a generic and positive professionalism. Others may cater to a certain demographic; and they may present themselves as hip, smart, ethical, posh, practical, fanciful, parental—you name it.
At this stage, all you need to consider is whether you feel comfortable with the image a targeted company presents. Down the line, though, if you take things a step further, folks on the other side of the table will be wondering how you might represent their image to the world.
The size of the system
When it comes to looking at the size of a franchisor, there’s no right or wrong measure. Instead, you’re looking for an organization that feels like a good fit for you. Lately, I’ve been talking about colleges with my son and am reminded of the parallels to choosing a franchise investment. I asked him to think about whether he’d rather get the sense that he’s a small fish in a big pond or a big fish in a small pond—there are good arguments for either position.
In general, franchisors are masters of right-sizing their businesses—it’s one of the factors that distinguishes the good companies from the great. You can find terrific companies with just 100 franchisees and you can find great companies that have 2500 or more. At the end of the day, this is a personal decision, based on your comfort level.
When you’re considering buying a franchise, you’re weighing the risks and benefits of entering into a long term relationship with the franchisor—most likely for ten years or more. That’s a huge commitment.
The relationship is one that some sometimes gets complicated—what senior partner/junior partner relationship isn’t? It’s important that you feel comfortable with the franchisor you choose—and that you feel communication between you is clear and effective.
In these early stages, when you’re still exploring all your options, look for companies that clearly articulate goals and plans; executives who are both knowledgeable and relatable—even if only in their press quotes; and franchisees who seem happy and confident.
Feel good franchise
If you’re looking to connect in your community, to give back to society, to share a special gift or talent, there may be a perfect franchise for you. Some companies emphasize ethics and altruism in many aspects of their operations by prioritizing their roles as good corporate citizens; choosing environmentally friendly operating procedures; and/or fostering personal development and growth in their employees.
As you read about individual franchisors, this information sometimes bubbles to the top and makes one company stand out—especially if part of your motivation for going out on your own is to escape a corporation you’ve come to consider soulless. In addition to corporate commitment to philanthropy or ethical operations, some businesses are, by design, built to help people. If this is important to you, there are countless options that you might find appealing.
Each of these qualities can be important in your selection of the perfect franchise for you. A well-qualified franchise consultant can help guide you through an assessment of these and countless other factors.
Source: Hire Yourself – https://info.hireyourself.com/